Density functional theory (DFT) in its hybrid B3LYP formulation was applied to the investigation of the mechanistic details of the insertion of molecular oxygen into the palladium(II) hydride bond of the (PCP)Pd-H complex (PCP = 1,3-(CH2P'Bu-2)(2)C6H3-) to form the corresponding Pd(II) hydroperoxide. The calculations reveal that minima and transition state through which formation of the final product takes place are different along the singlet and triplet pathways. A triplet-singlet crossing occurs before the formation of a stable singlet intermediate from which the reaction straightforwardly proceeds to yield the singlet hydroperoxo complex. Differences and improvements with respect to analogous theoretical investigations are highlighted. (C) 2007 Elsevier B.V. All rights reserved.